Abstract

Despite the importance of the external task environment for firm performance, little is known about the mechanisms that enable firms to benefit from a specific environmental setting. The authors argue that firms adjust their entrepreneurial orientation (EO) to the external environment and use it as a mechanism to transform the advantages provided by the environment into above-average performance levels. Specifically, the authors use meta-analysis supplemented by structural equation modeling to explore the links among environmental munificence, hostility, dynamism and complexity, EO, and firm performance in a mediation model. The results suggest that environmental munificence, dynamism, and complexity affect EO and, in turn, firm performance. The authors discuss the meta-analytical findings with respect to their theoretical contribution and their practical implications.